Founded in 1989 by Vandana Luthra, VLCC Health Care Limited is the leader in the Indian beauty and wellness industry by market share in the total organized industry and has operations spanning over 301 locations in 134 cities and across 11 countries in South Asia, South East Asia, the GCC Region and East Africa.
Talking about the Indian Beauty & Wellness India, VLCC has emerged as the iconic brand for establishing a strong business via franchising. In an exclusive conversation with Wellness India, Sandeep Ahuja, Managing Director & Group CEO, VLCC Health Care Limited, talked tit-bits of VLCC Franchise in India and abroad.
VLCC franchise model & terms
At VLCC, we have two lines of business where we offer franchising opportunities. We have VLCC Wellness Centres, where we offer beauty and weight management solutions, and VLCC Institute of Beauty & Nutrition, which are vocational education institutes. For the centres, we have three formats for franchising; salons, slimming centres and wellness centres, that include both salon and slimming services. The franchising arrangement typically includes a sign-up fee, which varies by format and revenue share for a period of 5 years. For the VLCC Institute of Beauty & Nutrition, a similar franchising model is followed.
Selection criteria
Yes, as one of the leading brands in the wellness industry, we follow a stringent selection process for appointing our franchisees. Just like hiring an employee, the franchisee has to go through multiple interactions and discussions before we sign the franchise agreement. We also do a detailed background and reference check.
Expectations from franchisee
The success of a service business lies in leadership, and demonstrating excellent skills. So, as a leader, a franchisee is expected to lead from front. While, a growth-oriented attitude is important, we do not encourage people who look at this as merely an investment, but those who are passionate about the industry and about making a difference in people’s lives. Also, we have witnessed that efficiency and results are better, where owners are running the franchisee units themselves.
Franchisee- franchisor relationship
Franchisors and franchisees share a symbiotic and mutually beneficial relationship. A franchisor’s growth is closely related to his franchisee’s performance and growth. Thereby, a sound franchisor-franchisee relationship is the cornerstone of a successful franchise model. A franchisor needs to communicate to the prospective franchisee, the brand’s values, goals, and mission, which the franchisee must adhere to. The franchisor-franchisee relationship is critical to success of any business and it is based on transparency, support and ultimately performance.
Extending support to franchisee
As part of the service industry, which thrives on knowledge and training, VLCC provides both pre-operational and operational support, to enhance and measure its franchisee’s performance. We regularly upgrade and train franchisee staff to lift their service delivery standards. We also provide marketing support to our franchisee, whether digital or print.
Plans to enter in untouched area
As a growth-oriented company, we are on the lookout for partners across the country. For our centres, we are particularly interested in tier II and III cities where we see demand. Encouraged by the performance in cities like Darbhanga, Batala, Sangli and Tinsukia, where we are present through our franchisee partners, we are keen on entering other smaller cities.
Challenges faced
As a franchisor, we get several inquiries from potential investors but as I mentioned earlier, we are looking for partners who can run the business with passion and that is one of the challenges. The other is the shortage of skilled manpower, particularly trainers, which can be a potential roadblock to the expansion of the industry. Lack of standardization in training is also a challenge as it leads to gaps in delivery of professional services.
Roadmap ahead
At VLCC, we have very aggressive growth plans. We are entering tier II and III towns where the real estate cost is low and youth aspiration is high, in order to give best returns to our franchise. We are also targeting countries like Sri Lanka and Bangladesh as well as GCC and Africa, where obesity is posing to be a health crisis. VLCC is committed to raising awareness about this epidemic and offer solutions through our weight management solutions. We are actively seeking franchise partners in Turkey, Jordan, Lebanon, Egypt, Tunisia, Morocco, Uganda and Ghana for our wellness centres and vocational education institutes. We would like to associate with entrepreneurs from business backgrounds and SMEs.
Franchise operated outlets
Of a total of over 236 VLCC Wellness Centres and Salons and 64 VLCC Institutes globally, we have 40 wellness centres, 21 salons and 20 institutes which are franchise owned and operated. As of now we do not have any master franchisee, although we do have franchisee partners who operate multiple VLCC outlets.
Emerging franchise trends
The beauty and wellness industry is extremely dynamic and has been growing at 18-20 per cent for the last few years. Today, people are not shy of spending money to look good and feel good. There is an increasing focus on preventive healthcare for physical and emotional wellbeing, given the rise of lifestyle related diseases. Therefore, even a 1 per cent increase in consumer expenditure can potentially create an additional opportunity of Rs 600 crore for the industry. The industry is expected to touch Rs 1 trillion in the next 3 years and is projected to generate 7.39 million jobs in 2017 and 14.27 million by 2022.
Given the fantastic growth opportunity for wellness services, especially in tier II and III cities, franchising, with an established brand and strong fundamentals, is a good option. We also see lot of brands willing to franchise and experiment with different franchising models to scale up their operations.
